Metro Vancouver’s economic picture brightens starting in 2014: report

Derrick Penner, Vancouver Sun09.27.2013

A large rebar cage is lays on the ground while crews prepare for the installation during the construction of the Burquitlam Station on the Evergreen Line in Coquitlam, BC, August, 12, 2013.RICHARD LAM
/ PNG

Construction crews work on the building of the Burquitlam Station on the Evergreen Line in Coquitlam, BC, August, 12, 2013.RICHARD LAM
/ PNG

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Metro Vancouver’s economic prospects are expected to rise over the next few years, lifted by construction projects such as the Evergreen Line rapid transit, resource-related projects in the north and a return to more normal business and employment growth, the Conference Board of Canada reported Friday.

In its Economic Insights report covering 13 Canadian cities, the conference board estimates Metro Vancouver’s growth will hit 3.1 per cent in 2014, up from an estimated 2.2 per cent this year, and average just under three per cent through to 2017.

That should make Metro Vancouver the country’s third top performer economically behind Edmonton and Calgary, as the more heated cities of Saskatoon and Regina begin to cool.

Conference Board economist Greg Sutherland said Metro Vancouver is experiencing the immigration needed to sustain higher economic potential, more than the city has seen in the past couple of years.

Coupled with a recent upswing in real estate resales, Sutherland said there appears to be more upward momentum to get the city “more on line with Vancouver’s historical ranking as one of the more successful economic growth leaders.”

In its forecast, the Conference Board is expecting non-residential construction in Metro Vancouver to remain strong, including the Evergreen line and other transportation projects as well as a construction on a new Children’s Hospital. Residential construction, while not expected to be strong, is expected to trend higher than 2013.

“(Metro Vancouver) did have a weak ending to 2012, but 2013 has been better,” Sutherland said. “Now if that streak continues, which we’re expecting, that’s where we come up with our 3.1-per-cent growth (projection) for next year.”

And if that comes to pass, it will feed into higher demand for services, which should push employment growth, income growth and retail spending.

It is a more optimistic projection than the Central 1 Credit Union forecast, which estimates lower growth for all of B.C. in 2013 and sluggish conditions to persist into 2014.

Central 1 pegs B.C.’s growth at 1.4 per cent for this year and just 2.4 per cent next year before picking up in 2015, based on the assumption of better U.S. growth, more demand for B.C. exports and the start of major resource-oriented projects such as liquefied natural gas developments and new mines.

In the immediate term, Central 1 isn’t as optimistic as the Conference Board, viewing employment growth as “non-existent” in 2013 and immigration at a low for the last decade.

Both forecasts, however, agree that cash-strapped governments will contribute little to growth through public-sector spending.

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